FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


(X)            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended             March 31, 1997
                               --------------------------

                                       OR

( )            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to


                             Commission file number
                                    0-21558


                           CNL Income Fund XII, Ltd.
             (Exact name of registrant as specified in its charter)


          Florida                              59-3078856
----------------------------            -----------------------
(State or other jurisdiction                (I.R.S. Employer
of incorporation or organiza-             Identification No.)
tion)


400 E. South Street, #500
Orlando, Florida                                 32801
----------------------------            ------------------------
(Address of principal                          (Zip Code)
executive offices)


Registrant's telephone number
(including area code)                        (407) 422-1574
                                        ------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes     X      No
                                           -----        -----

<PAGE>









                                    CONTENTS
                                    --------






Part I                                                                    Page
                                                                         -----
  Item 1.  Financial Statements:

             Condensed Balance Sheets                                       1

             Condensed Statements of Income                                 2

             Condensed Statements of Partners' Capital                      3

             Condensed Statements of Cash Flows                             4

             Notes to Condensed Financial Statements                        5

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and
             Results of Operations                                          6-8


Part II

  Other Information                                                         9


<PAGE>



                           CNL INCOME FUND XII, LTD.
                        (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS


                                                   March 31,       December 31,
            ASSETS                                   1997              1996
                                                  -----------      ------------

Land and buildings on operating
  leases, less accumulated
  depreciation of $1,222,647 and
  $1,143,698                                        $21,003,519     $21,082,468
Net investment in direct financing
  leases                                             13,757,366      13,789,036
Investment in joint ventures                          2,500,179       2,496,749
Cash and cash equivalents                             1,883,060       1,800,601
Receivables, less allowance for
  doubtful accounts of $25,579 and
  $23,395                                               187,719         202,908
Prepaid expenses                                         11,126           6,786
Organization costs, less accumulated
  amortization of $8,965 and $8,465                       1,035           1,535
Accrued rental income                                 2,094,129       1,963,055
                                                    -----------     -----------

                                                    $41,438,133     $41,343,138
                                                    ===========     ===========


LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                    $    28,790     $     9,303
Accrued and escrowed real
  estate taxes payable                                   19,868          14,706
Distributions payable                                   956,252         956,252
Due to related parties                                    4,631           2,981
Rents paid in advance                                   137,596          69,790
                                                    -----------     -----------
    Total liabilities                                 1,147,137       1,053,032

Partners' capital                                    40,290,996      40,290,106
                                                    -----------     -----------

                                                    $41,438,133     $41,343,138
                                                    ===========     ===========





           See accompanying notes to condensed financial statements.

                                       1

<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                  Quarter Ended
                                                                     March 31,
                                                            1997                 1996
                                                         ----------           ----------
<S> <C>
Revenues:
  Rental income from operating leases                    $  603,795           $  648,513
  Earned income from direct financing
    leases                                                  410,967              433,494
  Contingent rental income                                    5,417                8,809
  Interest and other income                                  20,797               24,305
                                                         ----------           ----------
                                                          1,040,976            1,115,121
                                                         ----------           ----------

Expenses:
  General operating and administrative                       38,722               42,964
  Professional services                                       6,657                5,627
  Management fees to related parties                          9,913               10,054
  Real estate taxes                                           1,410                   -
  State and other taxes                                      18,090               17,958
  Depreciation and amortization                              79,449               81,949
                                                         ----------           ----------
                                                            154,241              158,552
                                                         ----------           ----------

Income Before Equity in Earnings of
  Joint Ventures                                            886,735              956,569

Equity in Earnings of Joint Ventures                         70,407               20,010
                                                         ----------           ----------

Net Income                                               $  957,142           $  976,579
                                                         ==========           ==========

Allocation of Net Income:
  General partners                                       $    9,571           $    9,766
  Limited partners                                          947,571              966,813
                                                         ----------           ----------

                                                         $  957,142           $  976,579
                                                         ==========           ==========

Net Income Per Limited
  Partner Unit                                           $     0.21           $     0.21
                                                         ==========           ==========

Weighted Average Number
  of Limited Partner
  Units Outstanding                                       4,500,000            4,500,000
                                                         ==========           ==========
</TABLE>





           See accompanying notes to condensed financial statements.


                                       2

<PAGE>



                           CNL INCOME FUND XII, LTD.
                        (A Florida Limited Partnership)
                   CONDENSED STATEMENTS OF PARTNERS' CAPITAL



                                          Quarter Ended          Year Ended
                                            March 31,           December 31,
                                              1997                  1996
                                          -------------         ------------

General partners:
  Beginning balance                        $   152,889         $   113,356
  Net income                                     9,571              39,533
                                           -----------         -----------
                                               162,460             152,889
                                           -----------         -----------

Limited partners:
  Beginning balance                         40,137,217          40,058,715
  Net income                                   947,571           3,903,510
  Distributions ($0.21 and $0.85
    per limited partner unit,
    respectively)                             (956,252)         (3,825,008)
                                           -----------         -----------
                                            40,128,536          40,137,217
                                           -----------         -----------

Total partners' capital                    $40,290,996         $40,290,106
                                           ===========         ===========





            See accompanying notes to condensed financial statements.

                                       3

<PAGE>



                           CNL INCOME FUND XII, LTD.
                        (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS


                                                          Quarter Ended
                                                             March 31,
                                                       1997            1996
                                                   -----------     ----------

Increase (Decrease) in Cash and Cash
  Equivalents:

    Net Cash Provided by Operating
      Activities                                   $ 1,036,652     $   960,631
                                                   -----------     -----------

    Cash Flows From Investing
      Activities:
        Collections on loan to tenant
          of joint venture                               2,059           1,863
                                                   -----------     -----------
            Net cash provided by
              investing activities                       2,059           1,863
                                                   -----------     -----------

    Cash Flows From Financing
      Activities:
        Distributions to limited
          partners                                    (956,252)     (1,001,252)
                                                   -----------     -----------
            Net cash used in
              financing activities                    (956,252)     (1,001,252)
                                                   -----------     -----------

Net Increase (Decrease) in Cash and
  Cash Equivalents                                      82,459         (38,758)

Cash and Cash Equivalents at
  Beginning of Quarter                               1,800,601       1,716,203
                                                   -----------     -----------

Cash and Cash Equivalents at End of
  Quarter                                          $ 1,883,060      $1,677,445
                                                   ===========      ==========

Supplemental Schedule of Non-Cash
  Financing Activities:

    Distributions declared and unpaid
      at end of quarter                            $   956,252     $   956,252
                                                   ===========     ===========




           See accompanying notes to condensed financial statements.

                                       4

<PAGE>



                           CNL INCOME FUND XII, LTD.
                        (A Florida Limited Partnership)
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 1997 and 1996


1.       Basis of Presentation:

         The accompanying unaudited condensed financial statements have been
         prepared in accordance with the instructions to Form 10-Q and do not
         include all of the information and note disclosures required by
         generally accepted accounting principles. The financial statements
         reflect all adjustments, consisting of normal recurring adjustments,
         which are, in the opinion of management, necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the quarter ended March 31, 1997, may not be indicative of the results
         that may be expected for the year ending December 31, 1997. Amounts as
         of December 31, 1996, included in the financial statements, have been
         derived from audited financial statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XII, Ltd. (the "Partnership") for the year ended December
         31, 1996.

                                       5

<PAGE>



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         CNL Income Fund XII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 20, 1991, to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as properties upon which restaurants were to be
constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains. The leases
are triple-net leases, with the lessees generally responsible for all repairs
and maintenance, property taxes, insurance and utilities. As of March 31, 1997,
the Partnership owned 48 Properties, including interests in four Properties
owned by joint ventures in which the Partnership is a co-venturer.

Liquidity and Capital Resources

         The Partnership's primary source of capital for the quarters ended
March 31, 1997 and 1996, was cash from operations (which includes cash received
from tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses). Cash from operations was $1,036,652 and
$960,631 for the quarters ended March 31, 1997 and 1996, respectively. The
increase in cash from operations for the quarter ended March 31, 1997, as
compared to the quarter ended March 31, 1996, is primarily a result of changes
in the Partnership's working capital.

         Currently, rental income from the Partnership's Properties is invested
in money market accounts or other short-term, highly liquid investments pending
the Partnership's use of such funds to pay Partnership expenses or to make
distributions to the partners. At March 31, 1997, the Partnership had $1,883,060
invested in such short-term investments as compared to $1,800,601 at December
31, 1996. The funds remaining at March 31, 1997, after payment of distributions
and other liabilities, will be used to meet the Partnership's working capital
and other needs.

         Total liabilities of the Partnership increased to $1,147,137 at March
31, 1997, from $1,053,032 at December 31, 1996, primarily as the result of an
increase in rents paid in advance during the quarter ended March 31, 1997. The
general partners believe that the Partnership has sufficient cash on hand to
meet its current working capital needs.

         Based on cash from operations, the Partnership declared distributions
to the limited partners of $956,252 for each of the quarters ended March 31,
1997 and 1996. This represents distributions for each applicable quarter of
$0.21 per unit. No distributions were made to the general partners for the
quarters ended March 31, 1997 and 1996. No amounts distributed or to be
distributed to the limited partners for the quarters ended March 31, 1997 and
1996, are required to be or have been treated by

                                       6

<PAGE>



Liquidity and Capital Resources - Continued

the Partnership as a return of capital for purposes of calculating the limited
partners' return on their adjusted capital contributions. The Partnership
intends to continue to make distributions of cash available for distribution to
the limited partners on a quarterly basis.

         The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses.
The general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.

Results of Operations

         During the quarter ended March 31, 1996, the Partnership owned and
leased 45 wholly owned Properties (including one Property in Houston, Texas,
which was sold in April 1996) and during the quarter ended March 31, 1997, the
Partnership owned and leased 44 wholly owned Properties to operators of
fast-food and family-style restaurant chains. In connection therewith, during
the quarters ended March 31, 1997 and 1996, the Partnership earned $1,014,762
and $1,082,007, respectively, in rental income from operating leases and earned
income from direct financing leases from these Properties. The decrease in
rental and earned income during the quarter ended March 31, 1997, as compared to
the quarter ended March 31, 1996, is primarily attributable to a decrease of
approximately $47,100 as a result of the sale of the Property in Houston, Texas,
in April 1996. For the quarters ended March 31, 1997 and 1996, the Partnership
also earned $5,417 and $8,809, respectively, in contingent rental income.

         For the quarters ended March 31, 1997 and 1996, the Partnership owned
and leased four and three Properties, respectively, indirectly through joint
venture arrangements. In connection therewith, during the quarters ended March
31, 1997 and 1996, the Partnership earned $70,407 and $20,010, respectively,
attributable to net income earned by these joint ventures. The increase in net
income earned by joint ventures is primarily due to the fact that the
Partnership invested in Middleburg Joint Venture in May 1996.

         Operating expenses, including depreciation and amortization expense,
were $154,241 and $158,552 for the quarters ended March 31, 1997 and 1996,
respectively. The decrease in operating expenses during the quarter ended March
31, 1997, as compared to the quarter ended March 31, 1996, is primarily
attributable to a decrease in accounting and administrative expenses associated
with

                                       7

<PAGE>



Results of Operations - Continued

operating the Partnership and its Properties. In addition, depreciation expense
decreased during the quarter ended March 31, 1997, as a result of the sale of
the Property located in Houston, Texas, in April 1996.

                                       8

<PAGE>



                           PART II. OTHER INFORMATION


Item 1.           Legal Proceedings.  Inapplicable.

Item 2.           Changes in Securities.  Inapplicable.

Item 3.           Defaults upon Senior Securities.  Inapplicable.

Item 4.           Submission of Matters to a Vote of Security Holders.

                  Inapplicable.

Item 5.           Other Information.  Inapplicable.

Item 6.           Exhibits and Reports on Form 8-K.

                  (a)      Exhibits - None.

                  (b)      No reports on Form 8-K were filed during the
                           quarter ended March 31, 1997.


                                       9

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 9th day of May, 1997.


                            CNL INCOME FUND XII, LTD.

                            By:   CNL REALTY CORPORATION
                                  General Partner


                                  By:   /s/ James M. Seneff, Jr.
                                        -----------------------------
                                        JAMES M. SENEFF, JR.
                                        Chief Executive Officer
                                        (Principal Executive Officer)


                                  By:   /s/ Robert A. Bourne
                                        -----------------------------
                                        ROBERT A. BOURNE
                                        President and Treasurer
                                        (Principal Financial and
                                        Accounting Officer)